Scribd
Upload
329 views21 pages

Aggregate Planning

The document discusses aggregate planning, which involves intermediate-range capacity planning over 2-12 months. It describes aggregate planning inputs like resources, demand forecasts, and policies, as well as outputs like projected inventory levels. The document outlines different aggregate planning strategies such as proactive, reactive, and mixed approaches, and basic level capacity and chase demand strategies.

Uploaded by

Muneeswaran
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
329 views21 pages

Aggregate Planning

The document discusses aggregate planning, which involves intermediate-range capacity planning over 2-12 months. It describes aggregate planning inputs like resources, demand forecasts, and policies, as well as outputs like projected inventory levels. The document outlines different aggregate planning strategies such as proactive, reactive, and mixed approaches, and basic level capacity and chase demand strategies.

Uploaded by

Muneeswaran
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 21

Aggregate Planning

Planning Horizon
Aggregate planning: Intermediate-range
capacity planning, usually covering 2 to 12
months.
Long range

Intermediate
range
Short
range

Now 2 months 1 Year


Overview of Planning Levels

 Short-range plans (Detailed plans)


 Machine loading
 Job assignments

 Intermediate plans (General levels)


 Employment
 Output

 Long-range plans
 Long term capacity
 Location / layout
Planning Sequence
Figure 12.1

Economic,
Corporate competitive, Aggregate
strategies and political demand
and policies conditions forecasts

Establishes operations
Business Plan
and capacity strategies

Establishes
Aggregate plan
operations capacity

Master schedule Establishes schedules


for specific products
Aggregate Planning Inputs

 Resources  Costs
 Workforce  Inventory carrying
 Facilities  Back orders

 Demand forecast  Hiring/firing

 Policies  Overtime

 Subcontracting  Inventory changes

 Overtime  subcontracting

 Inventory levels

 Back orders
Aggregate Planning Outputs

 Total cost of a plan


 Projected levels of inventory
 Inventory
 Output

 Employment

 Subcontracting

 Backordering
Aggregate Planning Strategies

 Proactive
 Alter demand to match capacity
 Reactive
 Alter capacity to match demand
 Mixed
 Some of each
Demand Options

 Pricing

 Promotion

 Back orders

 New demand
Capacity / Supply Options

 Hire and layoff workers


 Overtime/slack time

 Part-time workers

 Inventories

 Subcontracting
Aggregate Planning Strategies

 Maintain a level workforce


 Maintain a steady output rate
 Match demand period by period
 Use a combination of decision
variables
Basic Strategies

 Level capacity strategy:


 Maintaining a steady rate of regular-time
output while meeting variations in demand
by a combination of options.
 Chase demand strategy:
 Matching capacity to demand; the planned
output for a period is set at the expected
demand for that period.
Chase Approach

 Advantages
 Investment in inventory is low
 Labor utilization in high
 Disadvantages
 The cost of adjusting output rates and/or
workforce levels
Level Approach

 Advantages
 Stable output rates and workforce
 Disadvantages
 Greater inventory costs
 Increased overtime and idle time
 Resource utilizations vary over time
Techniques for Aggregate Planning

1. Determine demand for each period


2. Determine capacities for each period
3. Identify policies that are pertinent
4. Determine units costs
5. Develop alternative plans and costs
6. Select the best plan that satisfies objectives.
Otherwise return to step 5.
Average Inventory

Average Beginning Inventory + Ending Inventory


=
inventory 2
Aggregate Planning in Services

 Services occur when they are rendered


 Demand for service can be difficult to predict
 Capacity availability can be difficult to
predict
 Labor flexibility can be an advantage in
services
Aggregate Plan to Master Schedule
Figure 12.4

Aggregate
Planning

Disaggregation

Master
Schedule
Disaggregating the Aggregate Plan

 Master schedule: The result of disaggregating


an aggregate plan; shows quantity and timing
of specific end items for a scheduled horizon.
 Rough-cut capacity planning: Approximate
balancing of capacity and demand to test the
feasibility of a master schedule.
Master Scheduling

 Master schedule
 Determines quantities needed to meet demand
 Interfaces with
 Marketing
 Capacity planning
 Production planning
 Distribution planning
Master Scheduler

 Evaluates impact of new orders


 Provides delivery dates for orders

 Deals with problems


 Production delays
 Revising master schedule

 Insufficient capacity
Master Scheduling Process
Figure 12.6

Inputs Outputs
Beginning inventory Projected inventory
Master
Forecast Master production schedule
Scheduling

Customer orders Uncommitted inventory


Projected On-hand Inventory

Projected on-hand Inventory from Current week’s


inventory
=
previous week
- requirements

You might also like